IBM "reaffirms" guidance

I have to say, I'm generally surprised that there haven't been more preannouncements in tech. I think companies must just be afraid to say anything. Their stocks are getting pounded and business has evaporated.

IBM, however, has decided to lay it out there. Revenues look about a billion below analysts forecasts of 26.3 billion. Gross margins are slightly better than expected and pretax income is a little higher as a result. They're reiterating their prior earnings guidance of $8.75 for the year.

Conspicuously absent from the release is any kind of bookings guidance for the services division -- which to me (and most analysts) is the real indication of business strength for IBM. Without bookings and backlog, you can't really tell what IBM's future business looks like. With a hundred billion or so of backlog, IBM can play with the quarterly figures pretty broadly. They can recognize previously booked business in a given quarter to show what they'd like. That's part of why it's perceived as safe.

The problem with the stock, though, is IBM relies on a significant corporate finance division to fund operations. IBM relies on the strength of other businesses to sustain growth -- and there isn't a lot of that strength stuff right now. As the economic weakness has spread beyond the United States, IBM's recently described business as usual tone has probably changed.

I had suggested buying this stock in a fit of trying to catch the bottom last week. That was a bad call. I'd sell the stock into this guidance reiteration if I still owned it.

Again, apologies for bad stop loss reporting. You should know this about me -- I turn on a dime at times. Usually it means I've gotten hurt and I want out now.